Bharat Coking Coal Ltd (BCCL) has recorded sale of 140,400 t of coking coal through three separate auctions in August 2022. The grades on offer were W-II, W-III and W-IV of which the premium grades, W-II and W-III, constituted 95% of the total quantity.
The company fetched an average price realisation against the booked quantity at INR 9,269/t, while the bid premium over the notified price was 136%. The bid premium rose compared to July’s bid premium of 131%. This rise is because of the expectation of rising demand after monsoon.
Auction snapshot
A lowdown of the auction sales indicated dwindling interest from the buyers. Incidentally, the bid premium, which is indicative of supply dynamics, saw a decline in tandem with the increase in offer quantity.
In the auction held on 1 August, the company had offered 27,000 t of coal against which bid premium of 167% was recorded. However, the premium fell in subsequent auctions where comparatively higher quantity was put on sale.
Notably, the highest quantity of 76,000 t was offered on 17 August, but it registered the lowest bid premium of 121%.
Grade-wise bid prices
W-IV coal was booked at a price realisation of INR 9,785/t fetching a premium of 186% over the notified price. Due to lower offering, this coal was sold at a comparatively higher price than the premium grades – W-II and W-III.
- The price realisation for W-III was INR 9,336/t and it fetched a bid premium of 107%
- W-II was sold at the lowest bid premium of 107% in the lot.
Outlook
BCCL had conducted three auctions during the month yet the total quantity for sale was comparatively lower than previous months.
In general, the supply tightness supported aggressive bidding in the auctions. However, any significant movement at the reseller’s market was not seen as dispatches have not started.
Nevertheless, with the monsoon season coming to an end, demand for coal is expected to rise as industries would seek adequate supply of coking coal which would boost prices in the near term.
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